Has Anyone Noticed a Surge in HOI?

Question

Recently we've seen a dramatic increase in our rentals HOI premiums. We're wondering if anyone else has noticed a similar increase.

For example one property went from $829 to $1575 (one roof claim were the roof was replaced in its entirety)

Another from $837 to $1005 (no claims)

Is this just happening across the board? Inflation related?

Cameron Moore · Answer

Reposting a Forum post fyi:

Long post alert! (Worth the read though) I hope that you find the below information useful and I hope that it helps explain what is happening in the insurance world today. It won’t matter what carrier you are with, this is an industry wide issue. The Insurance market place is tightening up and it's happening fast.  Carriers are pulling hard stop on issuing new business and carriers are also leaving the market or selling to other carriers/merging. They simply can't operate profitably in this inflated market. This market is disrupted and it WILL affect all of us. The cost of claims has risen exponentially in the past 2 years. Thus resulting in the carriers having to raise premiums and pull out of some markets. Your rates have gone up and will continue to go up even more. This isn't personal, it’s not based on a claim you may or may have not had, it’s simply the cost of doing business.

The cost to rebuild your home is up dramatically due to the rising cost of materials and labor. Supply chain for materials continues to be an issue. We can all agree that everything has gone up in price. Carriers simply can’t survive paying these higher prices without charging more themselves.

Litigation is expensive and settlements are rising at an unprecedented rate.

ReInsurance (the insurance your insurance carrier buys to help cushion catastrophic loss) is at or approaching capacity in many markets, and rising rates are unsustainable.This is a significant issue affecting the property & casualty industry (home/Landlord and auto), and pricing correction is anticipated at least through 2024. States also require Carriers to have enough assets on hand to pay losses. This is a nice way to say - you will see rate increases and more frequently.There are some things you can do to help get through this current insurance market:

Consider Higher Deductibles. This will help save some money on your policy.

Discount Reviews - make sure you're getting everything you're entitled to. Every carrier has different discount opportunities. Make sure you go over those with your agent.

Bundle!! Bundled/Packaged policies most always include better coverage and benefits and the cost savings is usually 20% on each policy.

Consider tenure - jumping companies too often will hurt you in the long run. In addition, some carriers won’t take you as a new client if you have less than two years with a carrier. And more importantly, carriers are getting off of some risks if a claim happens in the new business term or for the number of claims in a 3-5 year window. Tenure matters with a carrier.

Absorb small claims when you're able. Talk with your agent and let them counsel you should a loss happen. Frequency of claims REALLY matters.

Buy your insurance from an experienced Independent Insurance Broker that has options and can help you navigate this crazy market WITHOUT SACRIFICING COVERAGE on the policy. CASH FLOW IS KING!!!

Chris Seveney · Answer

@Jeff Penovich

Yes it’s nationwide

Insurance is based on replacement value and cost of construction and claims elsewhere increased significantly- so yes it has risen by a big number in most places

Kevin Hoag · Answer

@Jeff Penovich Yes, insurance rates are going up across the entire country. The majority of carriers have taken double digit rate increases. Much of this is due to a surge in claims filed and the increased cost of those claims do to the price of materials and labor also going up. Your best option is to take some time and shop around. Find an insurance agent that can quote your properties through multiple carriers. If you own more than 5 properties there are insurance companies that offer portfolio policies which can save you money and make it easier. Instead of having individual policies to keep track of you only have to worry about 1 policy.

Jeremy H. · Answer

Mine increased from 10-50% here in Louisiana - the coastal area down here has had a lot of bad storms/flooding etc in recent years so we've seen an increase in premiums to having companies completely pull out of the area

Our property taxes increased as well and added in a new line item - a special assessment to pay for the damage caused by storms in the past several years

And tenants wonder why the rent goes up? It's not me, it's your government

Alecia Loveless · Answer

@Jeff Penovich My policies just about doubled for my 5 properties with one company. Haven’t gotten the last one yet that is with a different company entirely.

Has Anyone Noticed a Surge in HOI?

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